Will China Lead as White Knight in Troubled World Economy?

According to news sources, Minister Mentor, Lee Kuan Yew, claimed that although China as an emerging world power should be included in financial recovery plans, the country lacks critical knowledge about how the world financial system, which is largely American and British, has evolved over the centuries. He told a dialogue session held in conjunction with the 30th anniversary of China’s move to reform and open up to the world:

“The Chinese have learnt, read up history, ... but to know the intricacies of the system, that’s a different matter, and I think it will be a very difficult business to try and reframe our financial system anew.”

The general consensus is that China should continue to tap into its vast talent pool to progress in areas such as research and development, as well as developing innovations in all areas. In comparison with Singapore’s wealth of talent, Lee said:

“We are looking for diamonds on the seashore and they’ve got diamonds all over. The Chinese were right in not following the Japanese and Koreans in blocking out imports and trying to build champions for their motorcars or TV screens and instead welcoming foreign companies. They copied the Singapore model. Bring all the multi-nationals and let them compete among themselves.”
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China’s ambassador to Singapore, Zhang Xiaokang, praised Mr. Lee as the “founding father” of bilateral ties. He stressed that China must direct its energies to improving in the area of innovation, just as the Japanese did with Walkman music players and cameras.

China will save the world if it can. But I do not think it can. China will do the best it can to save a few friends, but China's economy is too small to save even one big economy like Japan or the US. In fact, China is having trouble in saving itself. China will have to be creative in solving its employment problems. Export will continue to decrease until the US and Europe start to grow again. Domestic consumption will be difficult to make up the loss in exports. It will be almost impossible for China to continue to grow at the desirable rate of at least 8%. China will have to learn to live with a modest growth of 5 to 7%. If China can not maintain even a 5% growth, it will not be able to save itself much less the whole world.